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E(R) 12.00% Standard Deviation of P 7.20%% T-Bill rate 3.60% Proportion of Complete Portfolio in P 80% Proportion of Complete Portfolio in T-Bills...
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Question

 Your client, Mr Bo holds a complete portfolio that consists of a

portfolio of risky assets (P) and T-Bills. The information below refers to these assets.

  
(a) What is the expected return and the standard deviation of Bo's complete portfolio? (4 Marks)
(b) What are the proportions of Stocks A, B, and C, respectively in Bo's complete portfolio?  (3 Marks) 

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E(R)
12.00%
Standard Deviation of P
7.20%%
T-Bill rate
3.60%
Proportion of Complete Portfolio in P
80%
Proportion of Complete Portfolio in T-Bills 20%
Composition of P:
Stock A
40.00%
Stock B
25.00%
Stock C
35.00%
Total
100.00%

Step-by-step answer

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Subject: Business, Finance

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